How hard is it to run a successful internet-based business?

[An-i-no 86]

Ok, I know there are a lot of vendors here so I figured I'd ask.

A good friend of mine recently came to me with a proposition. He inherited a good bit of inventory of aftermarket JDM parts (not sure on the specifics yet as this is in the baby steps phase) from his dad who ran a small eBay-based business with a few local sales here and there. The thing is, he wants to take it big and make this his living, and has offered me the opportunity to sort of spread the word and maybe buy into the company in it's infancy.

First off, I'm one year out of high school and currently at a Community College majoring in Mechanical Engineering and working at a pos fast food joint making ~$600 a month. I'm at a point in my life where I'm wondering if what I'm doing will turn around and feed me later. I do live with my parents (and our relationship is stable, so I don't expect to get kicked out any time soon) but I buy all my own food (I have a special section in the fridge just for my stuff lol) in lieu of paying rent. That's a little personal lol but what I'm trying to get across is that I'm attempting to break into self-sufficiency.

I would LOVE to break into the performance scene and be a big part of an independent business but sadly I have NO (nada, zero, zilch,) experience with owning a business. Honestly, I'm not really worried about that yet. What I want to know is...how difficult is it for those who have attempted it, done it, or seen it done? What does it take to be a mega-super-ballin ass eBay seller that maybe has an independent website and is a vendor in multiple places? Also...from a business standpoint, if we're in an empty market (meaning people drive a few hours away to get real performance parts) would it just be more profitable to have a brick and mortar shop that sells parts? I mean...being in the Car Audio community you see it all the time, some guy has a few bucks and calls up an OEM company or somebody starts up a little service that blows up like Toolmaker. I'm not asking for a "road map" per se, but I'm trying to judge how feasible this is.

One thing I DO know is that money makes money. By that I mean...you sell enough parts on the side (which he's doing already), get a few decals printed up (which is easy), put together a demo car (94 Nissan 240SX, he already has started work on) and put your name out there and find ways to make your business grow but once again, how feasible is that? Am I in over my head here or is this a golden opportunity?

[REVpuggie 23]

first , you have to think up a really good reason to buy at your place instead of all those other places !

than you need to know how much you need to sell per month to make a living and find a way to realize that.

third , a marketing plan !(website , a stand , advertisement , forum space , stickers and so forth )

[fearlessgangsta 12]

Where is Texas are you because there are a few shops if your in Houston?

A lot of shops start by just selling parts heresay and then blow up so you know it can be done.

Pics of said S14?

[OuTLaWeD 110]

i would do it as a side job and stay in college. make that your first priority and the jdm stuff your secondary that way if it falls on its face you'll have a fall back. you'll have nothing to loose that way, but if you make that store your first priority then look at everything you could potentially loose.

[An-i-no 86]

first , you have to think up a really good reason to buy at your place instead of all those other places !

than you need to know how much you need to sell per month to make a living and find a way to realize that.

third , a marketing plan !(website , a stand , advertisement , forum space , stickers and so forth )

Thanks for the advice. All of those would definitely be part of the business model.

Where is Texas are you because there are a few shops if your in Houston?

A lot of shops start by just selling parts heresay and then blow up so you know it can be done.

Pics of said S14?

Waco, about 3 hours north of Houston/Houston area. A lot of people here go to the Temple/Killeen area to get JDM stuff. That's about 45 mins away.

The 240 was recently in a wreck so it's being worked on currently. Luckily the frame was fine. I'll see if I can get some pictures

i would do it as a side job and stay in college. make that your first priority and the jdm stuff your secondary that way if it falls on its face you'll have a fall back. you'll have nothing to loose that way, but if you make that store your first priority then look at everything you could potentially loose.

Yeah I'm definitely going to stay in college. Money is just tight right now and I'm not sure if this is a wise investment. It sounds 100% plausible on paper but we all know how that can end up.

Thanks everyone for the replies.

[ricksi30 923]

I agree 100% with chill. I am 23 and made the mistake of putting college on hold for something very similar to what you are doing.. The only thing I regret is not staying in school. Now I'm back in school, and still doing my side thing. Had I not stopped going I could have a decent job and still be trying to get my dream going. It is a lot of work but if you keep your priorities in check I think you should go for it. Advertising and communication should be your top priority, along with a good product.

[ricksi30 923]

By the way I should have said that by "communication" I'm also meaning customer service.

[///M5 2,833]

Pretty easy to calculate how much you need to sell at what price to make what money. Then you need to figure out if the 4P's you've outlined will allow that price to get the volume you need to succeed.

[Impious 1,476]

80% of new businesses fail in the first year.

80% of the remaining businesses fail in the second year.

80% of those businesses fail in the third year.

So, there is a ~99.2% likelihood the business won't survive past 3 years.

[An-i-no 86]

I agree 100% with chill. I am 23 and made the mistake of putting college on hold for something very similar to what you are doing.. The only thing I regret is not staying in school. Now I'm back in school, and still doing my side thing. Had I not stopped going I could have a decent job and still be trying to get my dream going. It is a lot of work but if you keep your priorities in check I think you should go for it. Advertising and communication should be your top priority, along with a good product.

That's exactly what I'm worried about. I don't want to fall behind in school or any other part of my life that I find important. At the same time though, I wouldn't want to half ass my way through something that I've invested in. That wouldn't be fair to me, him, or a customer.

Pretty easy to calculate how much you need to sell at what price to make what money. Then you need to figure out if the 4P's you've outlined will allow that price to get the volume you need to succeed.

We discussed a little bit of the percentages and kinda sketched out some initial income figures. Right now everything is in a preliminary stage. He orders a small amount of product at a slightly discounted rate and sells it for more. What we're looking to do is increase sales so that we can order in larger groups for better discounts which obviously = more profit. If that takes off then MAYBE we'll look at some local warehouses or open a small shop. Like I said it's 95% eBay right now but we're looking to change that.

80% of new businesses fail in the first year.

80% of the remaining businesses fail in the second year.

80% of those businesses fail in the third year.

So, there is a ~99.2% likelihood the business won't survive past 3 years.

Honestly, even if it is just a little side income for a few years, I'll take that. Of course there's the pipe dream of being a nice shop or a sales mogul but I don't fully expect that.

[Aaron Clinton 2,372]

80% of new businesses fail in the first year.

80% of the remaining businesses fail in the second year.

80% of those businesses fail in the third year.

So, there is a ~99.2% likelihood the business won't survive past 3 years.

Is it the 80% rule for every year?

[Impious 1,476]

80% of new businesses fail in the first year.

80% of the remaining businesses fail in the second year.

80% of those businesses fail in the third year.

So, there is a ~99.2% likelihood the business won't survive past 3 years.

Is it the 80% rule for every year?

To be honest, I don't even know if it's true. It was just shoved down our throats by the profs through all 4 years of college

[StreetLegal 119]

80% of new businesses fail in the first year.

80% of the remaining businesses fail in the second year.

80% of those businesses fail in the third year.

So, there is a ~99.2% likelihood the business won't survive past 3 years.

Is it the 80% rule for every year?

To be honest, I don't even know if it's true. It was just shoved down our throats by the profs through all 4 years of college

Those guys can scare the shit out of you..lol... there is premise that those in the teaching profession is more so lack of real world experience, especially in their specific profession and remain there through out their careers, but they are good at what they do.

Op, I would try it. In many cases risk is what it takes, but keep the back up, atleast you have one.

[dem beats 1,223]

I think that percentage is low. And I think that even fewer of those companies are profitable.

And any business that is not a pioneer is most likely to get purchased by another company or.get legally squelched.

My friend just crushed a company that owned a website but didn't incorporate the name. He couldn't buy the website from the guy, so he incorporated a business that had the same name and issued a legal cease and desist on this other guy. The owner of the site was just squatting on the sight.... But business is cutthroat.

If I opened any business in a Market that is already saturated my only goal would be to get enough traffic to get purchased buy a company for more than I am worth.

The only reason to own a business is because you truely honestly love it. My family has a few businesses in them and they all make a living, but they do it because they love it and don't want to work for other people. It's not because its a good way to make money.

Finally unless you own the business or have equal share, stay out of it man. It is not worth the effort when you could just go to school and get a good job.

[///M5 2,833]

If you can't define your niche, IMO it won't be worth your time.

[dem beats 1,223]

If you can't define your niche, IMO it won't be worth your time.

This asshole summed it up. :-)

Unless it's your dream and your willing to scrape for it, walk away.

[Aaron Clinton 2,372]

Yay for 6 years and counting then.